Bangkok Post

How to build a sales force that delivers

Today's smart companies are turning selling into science.

By Satish Shanikar, Dianne Ledingham, Mark Kovac and Prisana Ratanasuwanasri

First published on Μαΐου 05, 2007
min read


Buoyed by record economic growth rates throughout Asia—Singapore and Vietnam expect a final tally of 8% for 2006 and China is projected at 10%—multinationals are eager to gain a foothold in the Asian marketplace. Their pursuit of growth comes at a time when new tools are allowing companies to vastly improve the effectiveness of that key resource —the sales force. Instead of relying on top sellers to make it rain or hiring an army of new reps, they use new tactics that allow existing reps to sell more. Today, smart companies are turning selling into science. They're not solely depending on a few sales stars' native talents and gut instincts. Instead, they are reinventing their go-to-market approaches by using data, analysis and systematic selling tools to increase the productivity of reps across the board and help boost the performance of fair-to-middling performers up closer to the top quartile. By taking a systematic, data-driven and disciplined approach to reinventing their sales processes, top-performing organisations are better able to respond to new market environments, according to Bain & Company analysis. They attract the customers they want at a faster pace, and they're boosting average productivity across the entire sales force. Average sales for each rep have increased by as much as 50% in two or three years, with most firms seeing sales increases around 30%. As a result, these companies are growing at surprising rates. Take the example of a global pharmaceutical company trying to capture more market share in China. By revamping its sales force approach, the pharmaceutical giant has made dramatic inroads. First, it refocused its market push around cities with the highest concentration of targeted hospitals and physicians. Next, it systematically mapped deployment of sales teams, focusing on physicians with strong prescription potential. Finally, it reorganised sales teams around large hospitals, instead of broader disease areas. The new approach has allowed the pharmaceutical company to beat the market growth rate in China, with sales in the targeted hospitals growing at twice as fast as at other facilities. Sales force leaders share a few common practices. They include: - Segment with a science. GE's Commercial Finance division achieved a dramatic $300-million increase in new business by revising the way it looked at customers in its database—using past company transactions—and instead turned to sophisticated analysis to identify prospects with the highest likelihood of doing business with GE. These customers were three times more likely to buy, but under the prior system, half of them—10,000 customers—hadn't been considered top priorities by sales managers. With new leads in hand, GE restructured the sales territories to ensure that each had plenty of high potential sales opportunities. And it introduced new marketing campaigns to support the sales force with the tools and processes necessary for field sales. - Scope the market. Instead of setting the same sales goals for every region and segment, top performers take an outside-in, bottom-up approach to setting sales goals. They gather market and competitive data, then adjust growth goals repeatedly to make them more realistic. Sales management can use the new data to develop highly accurate forecasts and set expectations for salespeople that are better aligned with corporate goals. - Step up productivity. Best-practice organisations hit their sales targets by first increasing an individual rep's productivity and only then selectively (and judiciously) adding more "feet on the street". To make productivity predictable and manageable, sales leaders focus on four levers included in an integrative approach that we call TOPSales: - Targeted offerings: Sell products and services to the most appropriate and profitable, segments; - Optimised automation, tools and procedures: To reach those targets, bolster technology with disciplined sales management processes; - Performance management: Align metrics, incentives and skill development to prompt the right behaviours and reward high-performing reps; - Sales force deployment: Cover the market opportunity with the right sales channels (such as direct sales, indirect sales and telesales) at the right levels so that prospects and current customers can be serviced effectively and economically. - Look to the "next practice". Successful companies are always asking "How can I do better?" Cisco Systems, famed for its use of Web-based sales tools, draws information from a data rich sales-performance website to improve its forecasting accuracy. The company provided its reps with state-of-the-art personal digital assistants with custom applications for the devices that let reps check all of their customers' recent activities. Hewlett-Packard, the global market leader in printers has transformed the way it sells to Asian businesses by adopting this approach. HP now uses rigorous customer segmentation based on a holistic view of the market, and has greater sales coverage of its largest accounts, to increase its share of customer spending in the segment. In addition, the company deploys a telephone sales force to handle routine administrative chores, allowing sales managers in the field to be more productive. The result: a steady increase in HP's sales and profits in the region. HP printing has gained an in-depth understanding of its customers' buying behaviours, developed the ability to target previously untapped customers, especially in the government sector, and it has improved its product mix, driving new sales of print services. Smart sales leaders such as HP know they can no longer rely on their top sellers to sustain sales growth. One pharmaceutical services company has developed a multi-stage sales mentoring programme that pays a small commission to the mentor for improved productivity of his or her "mentee". The overall goal: to narrow the gap between the stars and the rest of the sales force. Companies that do this well have seen the sales of lower-performing reps increase by as much as 200%. But practitioners of the scientific approach also know that improved sales can vanish in an instant. Sales leaders always look ahead, incubating the next generation of tactics and strategies so that they can continue to reinvent sales force effectiveness. Satish Shankar is a partner with Bain & Company SE Asia and a member of the firm's Performance Improvement Practice. Dianne Ledingham is a partner with Bain & Company in Boston, and Mark Kovac is a partner in Dallas. Prisana Ratanasuwanasri is a manager with Bain & Company SE Asia.

Buoyed by record economic growth rates throughout Asia—Singapore and Vietnam expect a final tally of 8% for 2006 and China is projected at 10%—multinationals are eager to gain a foothold in the Asian marketplace. Their pursuit of growth comes at a time when new tools are allowing companies to vastly improve the effectiveness of that key resource —the sales force. Instead of relying on top sellers to make it rain or hiring an army of new reps, they use new tactics that allow existing reps to sell more.

Today, smart companies are turning selling into science. They're not solely depending on a few sales stars' native talents and gut instincts. Instead, they are reinventing their go-to-market approaches by using data, analysis and systematic selling tools to increase the productivity of reps across the board and help boost the performance of fair-to-middling performers up closer to the top quartile.

By taking a systematic, data-driven and disciplined approach to reinventing their sales processes, top-performing organisations are better able to respond to new market environments, according to Bain & Company analysis. They attract the customers they want at a faster pace, and they're boosting average productivity across the entire sales force. Average sales for each rep have increased by as much as 50% in two or three years, with most firms seeing sales increases around 30%. As a result, these companies are growing at surprising rates.

Take the example of a global pharmaceutical company trying to capture more market share in China. By revamping its sales force approach, the pharmaceutical giant has made dramatic inroads. First, it refocused its market push around cities with the highest concentration of targeted hospitals and physicians. Next, it systematically mapped deployment of sales teams, focusing on physicians with strong prescription potential. Finally, it reorganised sales teams around large hospitals, instead of broader disease areas. The new approach has allowed the pharmaceutical company to beat the market growth rate in China, with sales in the targeted hospitals growing at twice as fast as at other facilities.

Sales force leaders share a few common practices. They include:

- Segment with a science. GE's Commercial Finance division achieved a dramatic $300-million increase in new business by revising the way it looked at customers in its database—using past company transactions—and instead turned to sophisticated analysis to identify prospects with the highest likelihood of doing business with GE. These customers were three times more likely to buy, but under the prior system, half of them—10,000 customers—hadn't been considered top priorities by sales managers. With new leads in hand, GE restructured the sales territories to ensure that each had plenty of high potential sales opportunities. And it introduced new marketing campaigns to support the sales force with the tools and processes necessary for field sales.

- Scope the market. Instead of setting the same sales goals for every region and segment, top performers take an outside-in, bottom-up approach to setting sales goals. They gather market and competitive data, then adjust growth goals repeatedly to make them more realistic. Sales management can use the new data to develop highly accurate forecasts and set expectations for salespeople that are better aligned with corporate goals.

- Step up productivity. Best-practice organisations hit their sales targets by first increasing an individual rep's productivity and only then selectively (and judiciously) adding more "feet on the street". To make productivity predictable and manageable, sales leaders focus on four levers included in an integrative approach that we call

TOPSales:

- Targeted offerings: Sell products and services to the most appropriate and profitable, segments;

- Optimised automation, tools and procedures: To reach those targets, bolster technology with disciplined sales management processes;

- Performance management: Align metrics, incentives and skill development to prompt the right behaviours and reward high-performing reps;

- Sales force deployment: Cover the market opportunity with the right sales channels (such as direct sales, indirect sales and telesales) at the right levels so that prospects and current customers can be serviced effectively and economically.

- Look to the "next practice". Successful companies are always asking "How can I do better?" Cisco Systems, famed for its use of Web-based sales tools, draws information from a data rich sales-performance website to improve its forecasting accuracy. The company provided its reps with state-of-the-art personal digital assistants with custom applications for the devices that let reps check all of their customers' recent activities.

Hewlett-Packard, the global market leader in printers has transformed the way it sells to Asian businesses by adopting this approach. HP now uses rigorous customer segmentation based on a holistic view of the market, and has greater sales coverage of its largest accounts, to increase its share of customer spending in the segment. In addition, the company deploys a telephone sales force to handle routine administrative chores, allowing sales managers in the field to be more productive. The result: a steady increase in HP's sales and profits in the region.

HP printing has gained an in-depth understanding of its customers' buying behaviours, developed the ability to target previously untapped customers, especially in the government sector, and it has improved its product mix, driving new sales of print services.

Smart sales leaders such as HP know they can no longer rely on their top sellers to sustain sales growth. One pharmaceutical services company has developed a multi-stage sales mentoring programme that pays a small commission to the mentor for improved productivity of his or her "mentee". The overall goal: to narrow the gap between the stars and the rest of the sales force. Companies that do this well have seen the sales of lower-performing reps increase by as much as 200%.

But practitioners of the scientific approach also know that improved sales can vanish in an instant. Sales leaders always look ahead, incubating the next generation of tactics and strategies so that they can continue to reinvent sales force effectiveness.

Satish Shankar is a partner with Bain & Company SE Asia and a member of the firm's Performance Improvement Practice. Dianne Ledingham is a partner with Bain & Company in Boston, and Mark Kovac is a partner in Dallas. Prisana Ratanasuwanasri is a manager with Bain & Company SE Asia.